Tax research

A Greenwich, Conn., investment banker was convicted on charges of evading millions of dollars of taxes, according to the U.S. Attorney for the Southern District of New York.A jury found Richard Josephberg guilty on a total of 21 charges, including three counts of tax evasion, four counts of failure to file tax returns, five counts of failure to pay taxes, two counts of subscribing to false tax returns, and single counts of conspiracy to defraud, health care fraud and obstructing the due administration of the Internal Revenue Service.

The Senate Finance Committee didn’t get the answers it was hoping for during a hearing this week with Treasury Department representatives on how to reduce the tax gap.In testimony before the committee, Treasury Secretary Henry Paulson said that Congress should focus its efforts on reducing the complexity of the tax code, as well as approving the entire budget request from the Internal Revenue Service and enacting the Treasury’s February legislative proposals that are backed by President Bush. Paulson said that in developing more than a dozen proposals to minimize the gap, the Treasury focused on changes that would come with minimal additional burdens.

Taxpayers frustrated by delays in Intuit Inc.’s tax-processing capabilities will have until midnight on April 19 to electronically file their returns.The Internal Revenue Service and Intuit said that as many as several hundred thousand last-minute tax filers were affected by Intuit’s server problems Tuesday night -- meaning that they, or their accountants, may have been unable to electronically file returns.

The Internal Revenue Service will grant a six-month tax filing and payment extension to those affected by the shootings at Virginia Tech.The relief applies to the victims, their families and emergency responders, as well as university students and employees.

The Brookings Institution has issued a new report, “A Local Ladder for Low-Income Workers: Recent Trends in the Earned Income Tax Credit.”Prepared by research analyst Elizabeth Kneebone, the report contains an analysis of Internal Revenue Service data on low-income working families who received the federal EITC for the 2000 and 2004 tax years. Among the report’s findings:

If Democrats are serious about rolling back the alternative minimum tax, then they should be happy to have gotten a little more fodder last week to use in whatever PR campaign accompanies the unveiling of their plan.The White House released copies of the tax returns for both the Bushes and the Cheneys last Friday, and both families somehow found their way to avoiding the AMT.

Internal Revenue Service Commissioner Mark Everson will leave the agency to become president and chief executive of the American Red Cross next month.Everson, 52, has served as IRS commissioner since May 2003. During his time with the agency, he has publicly focused his attention on efforts to better serve taxpayers, continue the agency’s modernization of its systems and enhance its enforcement activities. In recent months, Everson has heard increased clamoring from Congress over how the agency and the Treasury Department should best work to address the nation’s growing tax gap -- estimated at $345 billion for the 2001 tax year.

Like crocuses, Justice Department press releases detailing prosecutions for tax evasion seem to proliferate in early spring, usually just before the the bulk of tax returns are to be filed. This year was no different.

A real estate investor from Brooklyn, N.Y., had the requisite skillz to win the $25,000 TaxRap contest sponsored by TurboTax.In a statement, the company said that the submission from Christian Pulfer, 28, stood out as one of the most individual and creative entries. Pulfer’s entry, “It’s Just a Breeze…G,” was selected by guest judge Vanilla Ice from more than 370 homemade rap videos.

The White House released copies of the tax returns for both the Bushes and the Cheneys late last week.

Late last week, the Internal Revenue Service learned of a new tax scam on the Internet that lures taxpayers into filing tax information on a site masquerading as a member of the Free File Alliance.The IRS reminded taxpayers the only place to access the Free File program is through the official IRS Web site, at www.IRS.gov.

Strategies for the use of tax-deferred like-kind exchanges have grown over the years from almost exclusively a real estate concern to one in which billions of dollars of business tangible personal property are traded each year. While the main battle continues to be waged over what dissimilarities in property are allowed and still qualify as "like kind," another fight has developed over how the property received in a like-kind exchange is to be depreciated.After tinkering with the depreciation rules in 2001 and 2004, the Treasury issued final regulations early in 2007. In its preamble to the final regs, the Treasury admitted that confusion and resulting inconsistency among taxpayers had developed. The final regs appear to do little to end those problems.

The Government Accountability Office said that the Internal Revenue Service doesn’t appear to be in a position to develop its own software for tax preparation anytime soon.As part of its partnership with the Free File Alliance, in exchange for a number of tax prep providers agreeing to provider their software free of charge to certain taxpayers, the IRS has agreed not to develop its own software. But because increased electronic filing would reduce the agency’s processing costs, reduce transcription errors and speed up refund turnaround, the GAO was looked to examine the benefits and costs of the agency creating its own online tax prep offering.

Internal Revenue Service agents are spending more time conducting face-to-face corporate audits that produce no revenue, according to a report released by the tax division of Syracuse University’s Transactional Records Access Clearinghouse.

In an annual ritual, many small businesses rush out after tax season to take their accountant's advice on the tax benefits of incorporation, and business software and services company Intuit has relaunched its online incorporation and document-filing services site to coincide with the rush.

Like their GOP predecessors, the Democrats in charge of Congressional tax committees continue to wring their hands over the fiscal train wreck looming due to the escalating alternative minimum tax.But agreement on a way to stop that runaway AMT locomotive - a step that many tax accountants say is needed to head off a tax revolt by millions of middle-income American families - seems just as elusive as ever.

New Jersey is working to join a roster of U.S. states that are offering tax breaks to local military personnel, as a state legislator has authored a bill that would exempt income earned by military personnel stationed outside the state for at least six months from the state's gross income tax."I think there's no question that our men and women who are serving in the military are sacrificing a tremendous amount already," said New Jersey Assemblyman Michael Panter, author of the bill. "To tax them from a state perspective, when they're not in New Jersey taking advantage of the state services and infrastructure, really it's a windfall to the state, and I think it's incredibly unfair."

A combination of both strong economic growth and low unemployment helped keep state tax rates flat for 2006. Nevertheless, some states are continuing to mine tax-related revenue streams."Currently, there are several states that are looking to improve their tax structure," explained Curtis Dubay, an economist at the Tax Foundation.

I just came back from a cruise that included a stop at George Town, Grand Cayman. Many people on the ship joked that this was an intended, featured port of call as they wanted to check up on their shekels in the island’s banks. Let me sort this out for you.

A grand jury indicted the founder of the “Girls Gone Wild” video series on charges of deducting more than $20 million in false business expenses on the 2002 and 2003 corporate income tax returns of his California-based Mantra Films Inc. and Nevada-based Sands Media Inc.Joe Francis, 34, is accused of an elaborate tax evasion scheme which involved the transfer of more than $15 million from a bank account in Bermuda to a Morgan Stanley brokerage account in Irvine, Calif. The account was held in the name of a Cayman Islands corporation that Francis allegedly controlled.